Mindoro Resources Limited has announced positive results with significant iron and nickel upgrades from bench and larger scale thermal upgrading tests on laterite samples from the Agata Nickel Project. On the basis of the encouraging test results Mindoro has commenced a scoping study to examine two scales of iron nickel sinter production, to be completed by September 2011.
The process of sintering and partial reduction involves heating the lateritic material in a furnace in excess of 1000 degrees Celsius in the presence of reductants such as coal. This has the effect of driving off all moisture, including water within the clay minerals, and also reducing oxygen content by reaction with coal. A reduced iron nickel sinter has no moisture, much improved blending properties and importantly, a dramatically reduced shipping cost, which results in added value over direct shipping of unprocessed lateritic ores.
Mr Jon Dugdale president & CEO of Mindoro said that "We are very pleased with the results of the thermal upgrading testing program. This is a key milestone towards value adding and enhancing the economics of a potential first stage of production. The completion of a scoping study with a positive economic assessment would precede a feasibility study into Stage 1 production."
Mindoro is pursuing an integrated two stage development approach to the Agata Nickel Project. Stage 1 was initially based on direct shipping of ore only, as announced in the results of the Preliminary Economic Assessment on March 29th 2011. Thermal upgrading has been identified as having the potential to significantly enhance the economics of Stage 1 and mitigate the current market uncertainty for unprocessed DSO material.
The Agata laterite has a layer at the top of the profile termed the 'Ferruginous Laterite' that is iron rich but has lower nickel grades. Recent drilling at Agata South included thicker intersections of this material including in ASL001: 4.7m of 50% Fe, 0.59% Ni and 0.11% Co from surface. Discussions with potential off takers indicate this material is in demand as a DSO product for the Chinese steel making market. Mindoro is investigating the potential market for an upgraded iron nickel sinter based on this near surface material that would otherwise be sub grade overburden for the Stage 2 acid leach processing operation.
On the basis of these results, Mindoro has commenced a scoping study and preliminary economic analysis for two scales of its thermal upgrading project, one producing 120,000 tonnes of iron nickel sinter per annum and the second producing 600,000 tonnes of iron nickel sinter per annum. The scoping study will examine capital and operating costs, supporting infrastructure and marketing the final product.
The scoping study, due for completion by end September 2011, will provide the necessary information upon which the Company can upgrade permitting and progress the Stage 1 iron nickel sinter project to feasibility.
The Agata Nickel Project Stage 2 pre feasibility study is progressing well, based on the positive preliminary economic assessment released on March 29th 2011 that described a 15 year project producing 18,000 tonnes of nickel in intermediate product per annum at low operating costs of USD 1.65 per nickel pound, with by product credits, and a Net Present Value at USD 10 per pound nickel price of USD 390 million.
Metallurgical test work in progress at SGS Minerals laboratories in Lakefield, Canada, in progress, has backed up the very high nickel extractions and fast leaching rates of the Agata resources that were achieved in the initial testing. Site locations for processing and residue storage have been selected and engineering studies are in progress. The study is due for completion in October 2011.
The company has been methodically drilling the Exploration Target area, of some 900 hectares, with the goal to expand upon the existing nickel laterite resource at Agata. Approximately half the area has been drilled and the Company is awaiting final results before finalizing a resource estimate increase that will be almost entirely a measured and indicated resource for open pit mineral inventory purposes and incorporation into the Stage 2 pre feasibility study production schedule. A component of the resource estimate will be allocated to the Stage 1 iron nickel sinter project scoping study schedule.
Indications from initial resource modeling show that the mineralized areas drilled to date are not as thick or as continuous as had been supposed by the original Exploration Target for those areas. There remain five more exploration target areas to be drilled, namely San Jose, Tapian MAMATFA, Tapian Corplex, Villariza and Mat I. At this point, it appears the magnitude of resource expansion for the areas drilled could be half what the January 2010 Exploration Target estimated for those areas. More data needs to be incorporated before the resources of the Exploration Target areas drilled to date can be fully modeled and estimated; the report is expected in Q3.
Mr Jon Dugdale said that "While it appears the Exploration Target will not be as big as we first thought, we believe that sufficient additional resources do exist to extend the projected life of the project well beyond the 15 years outlined in the Preliminary Economic Assessment released March 29th 2011 and will also provide for the early-stage iron-nickel sinter project scoping study. The Agata project is solidly advancing towards feasibility."
